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Cannot download any files from internet

Hi, I posted this issue in Window 7 forum on other site to solve "These Files can't be opened. Your Internet settings have prevent one or more files from being opened." and was able to solve the problem by disabling UAC but now a new problem issue appeared. I hope someone in this area knows this issue better so please help me. ISSUES:

1. IE8- whenever I try to download a file, I get the following error:

Unable to open this Internet site. The requested site is either unavailable or cannot be found.

2. Firefox [not sure the version] - whenever I try to download a file, it appears in the folders but unable to launch application.3. Opening an existing .exe file- whenever I try to open, all the sudden it asks me which program to choose.4. IE9- frustrated, I updated the older version but seems unable to download files as it says unable to download [long file name] on the bottom. Sometimes I click Yes or Save, nothing happens. So I assume, the problem is the same.

ADDITIONAL INFO: It seems like my computer has lost the ability to recognize file types. Whenever I save a picture from a source that i know are jpg formats are being saved as untitled.png, which is not normal. Also to launch applications, it doesn't execute .exe automatically.